GM Ordered to Pay $4.9 Billion in Crash Verdict

A Los Angeles Superior Court jury on Friday ordered General Motors to pay a record $4.9 billion in damages to two women and four children who were trapped and burned when the gas tank of their 1979 Chevrolet Malibu exploded after a rear-end collision on Christmas Eve six years ago.

Legal experts said the verdict was the largest ever in a personal injury case. The staggering amount of the award is not considered likely to withstand an appeal.

“An award this size gives the tort system something of a lottery character,” said USC Law School professor Gregory Keating. The high numbers reflect jurors’ outrage at GM’s conduct, he added.

Patricia Anderson, her four children and family friend Jo Tigner were awarded $107 million to compensate them for their pain, suffering and disfigurement. Jurors awarded $4.8 billion in punitive damages after finding that GM acted out of fraud or malice. The 12 jurors were swift and unanimous in rendering their verdicts after a 10-week trial that included emotional testimony from the burn victims, as well as an internal cost-benefit study that calculated the cost to the auto manufacturer of preventing fuel-fed fires. Attorneys alleged that GM chose not to spend $8.59 per car to correct the defect.

“GM has no regard for the people in their cars, and they should be held responsible for it,” said jury foreman Coleman Thornton.

“General Motors failed to install a safe fuel system design that would have prevented 300 to 500 deaths a year,” said attorney Brian Panish, who represented the burned children. “These victims here are the result of a corporate decision not to spend money for safer designs.”

Richard Shapiro, one of GM’s trial attorneys, said: “We’re very disappointed. This was a very sympathetic case. The people who were injured were innocent in this matter. They were victims of a drunk driver.”

He said he expects to file an appeal within two weeks.

The first step toward an appeal will come when the defense formally asks Superior Court Judge Ernest George Williams to reduce the award and set aside the verdict.

Ripples from the case were felt from the courthouse steps to Wall Street.

“How would you feel if your kids were in a burning car and you couldn’t help them?” said a weeping Anderson, who was driving the group home from church when they were rear-ended at 89th Place and Figueroa Street by a car going 70 mph. In the back seat were her children Tyshon, now 6; Alisha, 11; Kiontra, 15; and Kionna, 15. All were trapped and burned.

On the witness stand, jurors were riveted as Anderson recounted her horror and frustration at hearing her children’s screams as the vehicle filled with smoke and flames. But she was unable to reach them because the door handles were too hot to touch.

“I’ll be dealing with this for the rest of my life,” she said.

Her head and arms laced with ridges of scar tissue, 11-year-old Alisha Parker said in a soft, clear voice, “I’m not mad. I have no hard feelings.” She lost the fingers on her right hand in the crash and fire.

In after-hours stock trading on Friday, GM shares fell $1.63 to $66.13 as traders reacted to the verdict.

The award was slightly more than 10 times California’s previous record-setting verdict, also returned by a Los Angeles jury, in a 1994 insurance bad-faith case, said Todd Wolfe, president of an Oakland company that tracks verdicts in the state.

GM insisted Friday that the Chevy Malibu is safe. In a statement, the company expressed sympathy for the people injured in the accident, particularly the children. But it denied responsibility for those injuries, instead laying the blame on the allegedly drunk driver.

He was identified in news reports at the time as 28-year-old Daniel Moreno of Los Angeles and he was arrested on suspicion of felony drunk driving.

Spokesman Terry Rhadigan said Anderson’s Chevrolet Malibu was stopped at an intersection when the other vehicle plowed into it from behind. The driver of the other car was legally drunk, with a blood alcohol content of 0.20, GM said.

Shapiro said the defense was not permitted to tell the jury that the other driver was allegedly drunk, nor was it able to present statistics that showed the Malibu’s “outstanding safety record.”

Law professors and other experts said they expect GM lawyers to achieve a substantial reduction of the award.

“The more dramatic a verdict, the more likely it is to be reduced by the trial judge or an appellate court,” said Gary Schwartz, a UCLA law professor. He pointed out that an earlier case involving Ford Pinto gas tanks resulted in $125 million in punitive damages, which later was reduced to $3.5 million.

“Every time you hit that billion mark, it’s going to raise a lot of eyebrows,” said Alan Calnan, a professor at Southwestern University School of Law. The fact the punitive damages were 40 times the compensatory damages could signal the appellate courts that the amount was excessive, he added.

“Astronomical punitive damage awards of this magnitude are almost invariably cut back drastically, either on review by the trial court judge or on appeal, or sometimes both,” said Robert Rabin, a Stanford Law School professor.

“But in fact it may be that there will be another exploding gas tank case six weeks from now where the same pattern of conduct will be punished again by another jury,” he added. “A trial judge and certainly an appellate judge is aware of that.”

David Davis, senior vice president of DecisionQuest, a trial consulting firm headquartered in Los Angeles, said the jurors believed a corporation as large as GM can afford such damages. The jurors, he said, “clearly want to hurt GM. The jurors wanted to make a statement.”

Another influence may be lawsuits against tobacco firms, he said.

“It could be that the tobacco settlements have set a new psychological standard for jurors. There is not only a $206-billion settlement [the national agreement the cigarette companies reached with 46 states last November], but the companies continue to exist and sell cigarettes. There is no overt sign of any real injury or harm to them.”

Central to the GM case and the jury’s record verdict was the 1973 internal GM “value analysis,” a memo written by an engineer that calculated the cost to the auto manufacturer of preventing fuel-fed fires.

The engineer, Edward Ivey, used an assumption that “each fatality has a value of $200,000” and that there were a maximum of 500 fatalities per year in GM automobiles from fuel fires. The analysis said the deaths in such accidents were costing GM $2.40 per automobile.

Ivey also wrote, however, that his analysis must be tempered by the thought that “it is really impossible to put a value on human life.”

But the memo was kept away from juries for many years, in part because Ivey repeatedly testified that he did not know why he did the analysis, did not know if anyone asked him to prepare it, and did not believe it was circulated at GM.

New evidence that surfaced last year in cases in Florida and Georgia, however, suggested that Ivey had given varying accounts of the memo, lawyers for victims argued. In a 1981 statement to GM lawyers, which the auto maker had fought to keep secret under attorney-client privilege, Ivey said he had prepared the value analysis for Oldsmobile management.

Both documents were used in the Los Angeles case and apparently weighed heavily with jurors.

Still, the defense denies the concept of any “smoking gun” secret memo.

“There is no secret memo, regardless of what plaintiffs’ attorneys have suggested,” Shapiro said in a hastily called news conference in Coronado. “We categorically deny the idea that there was a memo that was ignored.”

Jurors deliberated just one day before awarding $25 million each to Anderson and Alisha, $15 million to Tigner and one of Anderson’s other children, and $10 million each to two of her other children.

They deliberated another day before awarding the $4.8 billion in punitive damages.

Attorneys for the plaintiffs did not ask for a specific amount, but pointed out that GM paid one of its expert witnesses $3.5 million over four years and spends about $4 billion annually on advertising.

GM is the world’s largest auto maker, with 1998 sales of $161 billion and profits of $3 billion. It designs, manufactures and markets vehicles under the Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac, GMC and Saturn nameplates. It produced more than 8 million vehicles for sale worldwide last year.

Attorney Carl Douglas, a member of O.J. Simpson’s criminal defense team, represented Anderson. Tigner was represented by attorneys Geoffrey and Mark Robinson, who worked on the Ford Pinto case.

Judging from the comments of six jurors who spoke to reporters on the courthouse steps, the panel indeed meant to send a message to large corporations that place profits over public safety:

“We’re telling [GM] that when they know that something . . . is going to injure people, then it’s more important that they pay the money to make the car safe than to come to court and have a trial all the time,” said juror Sheila Nash.

“GM talked to us like we were stupid,” juror Leonard Carter said. “Regular people like us buy cars like that. It shouldn’t be allowed.”

“I never knew how much power corporations have. We’re just numbers, I feel like, to them,” said juror Carl Evangelisti.

Jurors also pointed out that GM was on notice that the Chevy Malibu’s gas tank was unsafe.

“They knew what they were doing,” said Nash, “but they went on with a system that was unsafe.”

Juror Billy Lowe Jr. said he was most impressed by an internal memo that stated that gas tanks should be placed no closer than 15 inches to the rear bumper. Nonetheless, he said, the evidence showed the Malibu’s gas tank was 11 inches from the bumper.

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Times staff writers Rich Connell in Los Angeles, Tony Perry in Coronado and Donald Nauss in Detroit contributed to this report.